J.P. Morgan’s 16th annual energy paper confirms what large-load operators are experiencing firsthand: interconnection queues now exceed twice the capacity of the entire U.S. power fleet, gas turbine orders are sold out through 2030, median grid connection timelines have stretched to nearly five years, and 75% of planned behind-the-meter data center generation relies on natural gas.
The grid is not failing, but it is not scaling fast enough. For mission-critical facilities that require speed, reliability and contractual accountability, onsite distributed generation has moved from contingency planning to core infrastructure strategy.
Titled “Fighting Words,” the 2026 Energy Paper is a comprehensive, 94-page analysis of the forces reshaping global energy markets. Authored by Michael Cembalest, Chairman of Market and Investment Strategy, the paper examines the growing tension between accelerating power demand and the structural limitations of the existing electrical grid. For operators of mission-critical facilities, the findings reinforce a conclusion that is no longer debatable: waiting on the grid is a business risk that the market can no longer afford to absorb.
At Stella Power Company, we have been building our platform around this thesis. The data in this year’s J.P. Morgan report validates it with institutional-grade rigor.
Data Center Demand Is Straining the Grid in Real Time
The paper dedicates its largest section to the impact of data centers on U.S. power markets. The numbers are difficult to overstate. Interconnection queues now hold over 2,600 gigawatts of pending requests, more than double the entire installed capacity of the current U.S. power fleet.
In PJM, the independent market monitor attributed 75% of the region’s increased capacity payments directly to data center demand. These are not projections. They are measurements from operational grids under stress today.
AI Power Demand Trajectory
The report addresses whether efficiency gains or the shift from training to inference will moderate power demand:
- Power used to train frontier AI models is growing at approximately 2.2x per year.
- While Brookfield projects a gradual shift from training to inference, OpenAI projects it will still need more dollars for training than for inference through 2030, so the demand picture is far from settled.
- Curtailment of data center loads is harder than regulators assume: training workloads may be curtailable, but the majority of workloads are 24/7 inference and cloud-based operations where curtailment is a “much bigger challenge.”
The backlash is not a policy question. It is a market signal. Facilities that cannot demonstrate self-sufficiency or grid-adjacent generation capability are facing longer timelines, higher costs and growing community resistance.
Equipment Constraints Are Tightening Across the Board
The report documents a seller’s market in power generation equipment. Global gas turbine orders are surging, with GE Vernova, Siemens and Mitsubishi each holding 20% to 25% of global market share and planning production expansions. Even after ramping output, GE Vernova expects turbine reservations to be sold out through 2030. Suppliers now require non-refundable payments to secure manufacturing slots, a departure from historical procurement norms.
Transformers, breakers and other grid equipment face their own constraints, compounded by tariffs that do not benefit from the kind of exclusions granted to semiconductors. The median time from interconnection request to commercial operation has risen from 22 months to 54 months.
The paper notes that after 20 years of flat electricity demand, the U.S. now needs to meet simultaneous new demand from data centers, EVs and electrification of industrial, commercial and residential heating, and that the current pace of capacity additions, once adjusted for reliability and intermittency, is far more modest than nameplate figures suggest.
This is the environment in which Stella Power Company operates. We secured equipment positions early. We maintain relationships across the OEM ecosystem. And we deploy generation assets on competitive timelines. When utilities are constrained and equipment is scarce, execution capability becomes the differentiator.
Natural Gas Remains the Dispatchable Backbone
The J.P. Morgan paper is clear-eyed about the role of natural gas. U.S. natural gas production continues to rise, with 62% of all U.S. primary energy consumption now derived from hydraulic fracturing. Estimates of potential U.S. gas reserves have been increasing.
The paper’s analysis of solar plus storage versus natural gas as baseload power finds that even in high-irradiance markets like Las Vegas, deeply decarbonized solar and storage systems cost roughly $210 per MWh on an unsubsidized basis, compared to approximately $75 per MWh for an all-gas system using realistic capital cost assumptions.
For Stella Power Company’s clients, this analysis confirms what we have been engineering into every project: natural gas generation, delivered via secure underground pipeline networks, remains the most practical, scalable and cost-effective solution for dispatchable capacity. It is cleaner than legacy diesel by orders of magnitude, it is available today and it delivers the contractual accountability that mission-critical operators require.
Behind-the-Meter Generation Is No Longer a Contingency Plan
One of the most significant findings in the paper is the acceleration of behind-the-meter generation strategies among data center operators. A Bloom Energy survey indicates that 38% of data center operators expect to rely partially on their own onsite power by 2030, with 27% expecting to fully rely on their own generation. Cleanview data shows that 30% of planned U.S. data center capacity, representing 56 GW out of 190 GW, now intends to build its own behind-the-meter generation. Of that planned capacity, 75% relies on natural gas.
The report dedicates significant attention to “BYOG” (Bring Your Own Generation), identifying it as a fast-growing trend and directly aligned with our strategy at Stella Power Company.
- Less than 1% of data center power came from onsite generation in 2025, but a Bloom Energy survey indicates 38% expect to rely partially on their own power by 2030, with 27% expecting to fully rely on onsite power.
- Cleanview found that 30% of planned US data center capacity (56 GW out of 190 GW) intends to build its own behind-the-meter generation.
- 75% of BTM generation equipment relies on natural gas, with another 21% in nuclear. Very little BTM capacity is planned around renewables + storage.
- Most BTM installations are expected to be “grid-adjacent” (maintaining grid interconnection for redundancy and load balancing) rather than fully islanded.
- The median time from grid interconnection request to commercial operation has risen from 22 to 54 months, a key driver pushing customers toward BTM solutions.
The Regulatory and Emissions Landscape Favors Clean Distributed Generation
The paper’s analysis of emissions footprints reinforces another structural advantage of modern natural gas generation. MethaneSAT data shows that real-world emissions from oil and gas basins generally exceed reported inventories by approximately 50%, underscoring the importance of transparent, well-managed generation assets.
Meanwhile, the paper documents the growing regulatory and community resistance to diesel generation, the tightening of NOx emissions standards and the reputational risk associated with uncontrolled emissions, as illustrated by the scrutiny facing xAI’s mobile gas turbine installations in Memphis and Mississippi.
Stella Power Company deploys advanced rich-burn natural gas engines equipped to achieve up to 99% lower NOx emissions compared to legacy Tier 2 diesel systems. Our regulatory and environmental teams manage the full scope of air permitting, emissions compliance and environmental credit procurement, ensuring that every project we deliver meets the most stringent local, state and federal standards.
In a market where a denied air permit can strand millions of dollars in capital, our permitting capability is not a support function. It is a core competitive advantage.
Financial Structures That Remove the Capital Barrier
The J.P. Morgan paper notes that power can represent just 10% to 15% of data center lifetime costs, meaning the opportunity cost of delayed energization often far exceeds the cost of securing capacity through onsite generation. This calculus is driving a fundamental shift in how large-load customers procure power.
Stella Power Company structures flexible deployment models that align with this reality. Through Power Purchase Agreements, capacity payment contracts and other tailored strategies, we allow clients to deploy onsite generation with zero upfront capital expenditure. The client purchases reliable electrons at a predictable, contracted rate. We handle the engineering, permitting, financing, construction and ongoing operations. Capital stays deployed in the client’s core business.
The Structural Shift Is Accelerating
The 2026 J.P. Morgan energy paper is not making a speculative argument. It is documenting a structural shift already underway. Grid constraints are real. Equipment supply is tight. Interconnection timelines are lengthening. Load growth is accelerating. Regulatory and community resistance to large-load grid dependence is intensifying.
Onsite generation addresses each of these realities directly. It provides speed to energization, contractual accountability, long-term optionality and financial discipline.
Stella Power Company is an end-to-end energy partner delivering scalable, reliable onsite power for organizations that cannot afford to wait on the grid. The demand is real, the infrastructure constraints are structural and the market is moving. The companies that act decisively on distributed generation will be the ones that control their own timelines, their own costs and their own competitive positioning for the decade ahead.
